For the United States empirical studies indicate that over the past two hundred years the cost of international transportation relative to the value of U.S. imports has:
c. Not changed
d. Any of the above
The Correct Answer Is:
- b. Decreased
The correct answer is (b) Decreased. Empirical studies have shown that over the past two hundred years, the cost of international transportation relative to the value of U.S. imports has decreased.
This trend is a reflection of advances in transportation technology, globalization, and international trade practices. Let’s explore why this answer is correct and then examine why the other options are not accurate descriptions of this historical trend.
The cost of international transportation relative to the value of U.S. imports has generally decreased over the past two centuries. This trend can be attributed to several factors:
1. Technological Advancements:
The development of various transportation modes, including ships, airplanes, trains, and trucks, has significantly reduced the cost and time required for international transport. Innovations in propulsion, navigation, and logistics have made transportation more efficient and cost-effective.
The introduction of standardized containers for shipping goods has revolutionized the logistics industry. Containerization allows for easy handling, loading, and unloading of goods, reducing labor costs and transit times. It has led to a substantial decrease in transportation costs.
The growth of globalization and the expansion of international trade have increased the volume of goods transported across borders. This increased volume has led to economies of scale, further reducing transportation costs per unit of value.
4. Trade Agreements:
Trade agreements, such as the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), have lowered trade barriers, including tariffs and quotas, making international trade more accessible and affordable.
5. Improved Infrastructure:
Investments in transportation infrastructure, such as ports, airports, and highways, have enhanced connectivity and reduced transportation costs. Efficient infrastructure helps streamline the movement of goods.
6. Communication Technology:
Advances in communication technology have improved supply chain management and coordination, reducing the time and cost associated with international trade logistics.
Now, let’s examine why the other options are not accurate descriptions of this historical trend:
This option is not correct because empirical studies and historical data do not support the claim that the cost of international transportation relative to the value of U.S. imports has increased over the past two centuries.
Such an increase would be counter to the trends of technological progress and globalization, which have consistently led to reduced transportation costs and improved efficiency in international trade.
c. Not changed:
This option is not accurate either. While there may have been fluctuations in transportation costs over the years, the overall trend has been a decrease in transportation costs relative to the value of imports. The advent of modern transportation modes and logistical practices has led to significant changes in the cost landscape of international trade.
d. Any of the above:
This answer is not correct because it suggests that transportation costs relative to the value of U.S. imports could have increased, decreased, or remained unchanged.
However, empirical studies and historical data overwhelmingly support the conclusion that transportation costs have decreased over time as a result of the factors mentioned earlier. While there may have been short-term fluctuations, the long-term trend is one of decreasing transportation costs.
In summary, the correct answer is (b) Decreased, as empirical studies and historical data show that the cost of international transportation relative to the value of U.S. imports has generally decreased over the past two centuries.
This trend is a result of technological advancements, globalization, trade agreements, improved infrastructure, and other factors that have made international trade more efficient and cost-effective.